USA: Americans Rethinking What It Means to Be “Old” and 65 is Out

. Americans Rethinking the Definition of Old Age and Retirement, but Not the Qualifying Age for Social Security: Study SAN FRANCISCO (BusinessWire), August 28, 2008: Increased longevity and life expectancy are changing Americans’ perception of what it means to be “old,” causing many to reevaluate their retirement plans. A new study, commissioned by Charles Schwab & Co., Inc., gauged the perspectives of four different generations: * Silent Generation (born between 1924 and 1944), * Boomers (born between 1945 and 1964), * Generation X (born between 1965 and 1976) * Generation Y (born after 1976). The study uncovered a diversity of thoughts, dreams and goals surrounding how many of us have and will approach life’s third act, including interesting findings on how Americans are shifting their perspectives on what it means to be “old.” With people now living past 90 and even 100, Americans have begun to completely rethink what their lives after retirement will be like. The ‘Rethinking Retirement’ study revealed an overwhelming consensus among all four generations that old age has been delayed and now begins at 75 or older. 65 is Out, 75 is In Though the majority of respondents agree that old age does not begin until age 75, most Americans still think people should start receiving Social Security benefits between ages 63 and 65, with Generation Y respondents believing the benefits should begin as early as 61. “Surprisingly, study respondents believe they should qualify for ‘old age’ benefits 12 years before they become ‘old,’” said Ken Dychtwald, president and CEO of Age Wave and one of the leading authorities on retirement and the aging population, who collaborated with Schwab on the ‘Rethinking Retirement’ study. “With life expectancy increasing, many fear that their current savings will not sustain them to pay for everyday needs throughout retirement.” New Ideas of Work and Retirement Despite fears and concerns about outliving their money, Americans appear to be optimistic about retirement. The study found that this new perception of old age is further underscored by a shift toward a more active retirement. Indeed, 71 percent of study respondents say they plan to work while in retirement, and another 60 percent would like to take up a new career altogether. In fact, only seven percent of study respondents view this period as a time to unwind. “Delaying retirement provides individuals the opportunity to further grow their personal portfolio,” said Andy Gill, senior vice president, Investor Services, Charles Schwab & Co., Inc. “Many retirees are entering new part time careers as both a new challenge within the workplace and a source of additional income.” This new outlook on retirement also shows that nearly half (45 percent) of those surveyed see retirement as a time to give back to their family and community. With potentially more than a decade to live in retirement before reaching “old age,” many respondents believe that they can maintain a youthful lifestyle by using the time to volunteer. “It appears that Americans no longer view retirement as a time for rest and relaxation, but rather a time for personal reinvention and continued productivity,” said Dr. Dychtwald. “As Americans push the envelope on what it means to grow old and retire, it seems natural that companies would embrace these new paradigms and offer more flexibility in work style and in the education, tools and resources they offer employees.” Not Ready to Retire? Tips for Saving at any Age “No matter the circumstance, the bear market or a late start, it’s important to look to the future and identify opportunities to increase your next egg—there’s always something you can do,” Gill reminds. Now 1. Create a savings plan. 2. Take advantage of all your options. 3. Invest wisely. Ten years to go 1. Start thinking in detail—when you want to retire, where you would like to live, and what you want to do. Answering these questions will help you figure out how much all of it will cost. 2. Share your retirement dreams with your spouse. 3. Increase your savings and reduce your borrowing. Consider if it makes sense to accelerate your mortgage payoff. 4. Review your Social Security benefits. Have an idea of what you can expect and be you're your record is up to date. 5. Think about health care and long-term care insurance. If it makes sense for you, don't wait too long to lock in lower premiums. According to the Rethinking Retirement study, medical expenses not covered by insurance are everyone's top worry regarding retirement security. Two to Five years to go 1. Continue to refine the "when, where, what and how much." If you're not on track, be realistic about your options—you can save more now, postpone retirement and/or spend less or work part-time in retirement. 2. Revisit your asset allocation and start thinking about a portfolio withdrawal strategy. 3. Fine-tune your retirement budget. List sources of income and expenses in as much details as possible. Separate expenses into two categories—discretionary and non-discretionary. 4. If you plan to move, create a "short list" of desired retirement locations. Last 12 months 1. Check up on your Social Security benefits. 2. Finalize your cash flow budget and your withdrawal strategy. 3. Review any existing insurance policies to be sure you're not paying too much for the wrong kind of coverage. 4. Give notice to your employer at the appropriate time. 5. Consider consolidating accounts to help simplify your financial life going forward. In retirement 1. Review your budget annually and combine your cash flow planning with your portfolio rebalancing. 2. As age 70½ approaches, don't forget you'll need to start taking required minimum distributions from your traditional IRA. You have until April 1 of the following year to start, but that means taking two distributions in the first year. 3. Continue to monitor your investment performance and, in addition to rebalancing annually, think about periodically shifting your strategic asset allocation as time goes by. 4. Be sure to stay well diversified. 5. Periodically review all the categories of your insurance coverage. 6. Be sure your estate and gifting plan, account titling and beneficiary designations are up to date. More information on the study is available at rethinkingretirement.schwab.com, along with a self comparison tool (rethinkingretirement.schwab.com/survey) and an ongoing series of cross-generational discussions on retirement. © 2008 Charles Schwab & Co., Inc.